With less than half a million inhabitants, Luxembourg is one of the smallest of the 27 European Union countries. The Grand Duchy of Luxembourg is a country in Western Europe, it borders with Belgium in the West and the North, with France in the South, and Germany in the East. It is situated near some of Europe’s most prosperous markets and some of the largest European economies such as France and Germany whose languages are officially acknowledged for their administrative use in the country.
Luxembourg boasts an appealingly progressive business climate and a highly advanced, diversified economy. What Luxembourg lacks in size, it makes up in wealth. Luxembourg ranks among the world’s most prosperous nations and tops both the Global Competitiveness Index and Global Innovation Survey
The Luxembourg limited liability company, officially known as a “Société à Responsabilité Limitée” (SARL), is one of the preferred business forms. Limited liability companies come with great advantages for those interested in doing business in Luxembourg.
Minimum company registration requirements for a Luxembourg LLC
- it only needs two shareholders who can be local or foreign natural persons or companies;
- it is also possible for a single shareholder to start a limited liability company in Luxembourg;
- the management of the company can fall on one person who does not have to be a Luxembourg national.
- Low Minimum Capital: The minimum authorized capital is 12,500 Euro. This amount needs to be contributed in full in the form of cash or non-cash contribution. The company’s capital is divided into registered shares. Each share is of the same value and each share will have a minimum value of 25 EUR.
- Simple Business Structure: Reduced administrative formalities to run the business.
Luxembourg has a free-trade policy; restrictions are not imposed on foreign ownership of a business. Foreign companies and individuals may handle investments without seeking permission from any authority. Foreign companies and individuals may acquire or form any kind of company or partnership. They are free to acquire immovable property and to obtain mortgages; they are also free to import capital from abroad and to use capital markets.
Partners are only legally liable up to the amount of their contributions to the company’s share capital.
Starting with the year 2013, all LLCs in Luxembourg are subject to corporate taxation at a rate of 29.22%. This rate is made of the following components: corporate income tax at a rate of 21% on income exceeding 15,000 EUR (or a rate of 20% for income not exceeding 15,000 EUR), the solidarity surtax at a rate of 7% as well as the municipal business tax at a rate of 6.75%.
The Luxembourg limited liability company can be used for various purposes. It is one of the best options for those seeking to create holding companies in Luxembourg; and it also makes a great choice for those who plan to start small and medium-sized businesses, as well as for those who want to offer various services.
Luxembourg is an attractive business location. The country’s economic policies encourage investments and private initiative. The Luxembourg Government encourages innovation and investments in certain business fields through a series of incentives.
